Operator: Our next question comes from the line of Matt Hedberg from RBC Capital Markets.
Matt Hedberg : Gary, could you talk — you mentioned some of the challenges from a macro perspective. A little bit more color on how the quarter played out. Was the demand environment fairly stable? Or did things get little bit more challenging towards the end of the quarter? And then secondarily, how is the U.S. Fed business for you all this quarter?
Gary Steele: Yes. So first on macro conditions, we first started seeing a macro change in July. And so what we did see over the course of the quarter was pretty consistent behavior. So we didn’t see more intense macro issues as we got to the close of the quarter. It was very consistent throughout. And I think because we had started in July, it felt very consistent to us through that entire period. And it was really focused again around cloud migrations, which typically are big projects. or associated cloud expansion. That’s really where we felt it. Now I’ll reiterate, as I said before, we saw great consistency to on renewals. We saw no issue getting customers to renew it was really much more around cloud where the macro conditions play a role.
And then to your question on the public sector business, we were very pleased with the results that our public sector team delivered. We had very good execution in the quarter. Really proud of what the team put up for us. We still think there’s a tremendous opportunity there. We have new leadership in our public sector team that’s really helping us drive execution. So super excited about that as well.
Operator: Our next question comes from the line of John DiFucci from Guggenheim.
John DiFucci: Gary, margins were really strong, right? So I’m just curious, though, is when we think about that sort of conflict sometimes between growth and margins. Is that something that we should think a little bit more about if margins continue to be strong? In other words, is a focus on margins in any way inhibiting growth? Or is there just simply room for efficiency gains here while still investing for ample growth?
Gary Steele: Yes. I do not think at all that we’re inhibiting our ability to grow with the cost initiatives that we put in place. And I actually believe what we’re doing is creating a more efficient business that can scale more effectively that can better deliver for customers. So I do not believe anything that we’re doing is inhibiting our ability for the business to grow.
Operator: Our next question comes from the line of Brad Sills from B&A Securities.
Brad Sills: I wanted to double-click on the efforts to drive efficiencies in sales and marketing. It sounds like single seller approach is the direction you’re heading. Could you just explain a little bit kind of where you’re coming from, why this might be productivity enhancement in the sales and marketing area?
Gary Steele: Yes. No, great question. So historically, what we had were distinct sellers for security and observability working in conjunction with core sales reps. And it actually wasn’t great from a customer experience because you’d have multiple reps needing to interact with customers. And so the single seller model supported by the right level of expertise and knowledge is a more efficient way to handle the customers’ use cases and help drive the opportunities. And so it’s just much, much simpler. It’s more — it’s simpler for Splunkers and it’s actually simpler for customers. And it ultimately results in nice cost efficiency as well. So it has multiple benefits to it.
